Diabetic nephropathy (DN) is the leading cause of ESRD in the U.S. and cardiovascular (CV) morbidity and mortality are excessive in this population. Preliminary data from the Reduction in Endpoints in NIDDM with the Angiotensin II Antagonist Losartan (RENAAL) trial indicate that anemia is a modifiable risk factor for ESRD and CV morbidity and mortality in type 2 DN. I hypothesize that hemoglobin (Hb) is an independent predictor of both renal and CV disease in this population. The specific aims of this project are to determine if anemia is an independent predictor of 1) ESRD; 2) cardiovascular morbidity (non-fatal CV events defined as hospitalization for heart failure, myocardial infarction, and unstable angina, and mortality (sudden cardiac death, death due to progressive heart failure, myocardial infarction, and other cardiac causes) and 3) hospitalization for revascularization (coronary, peripheral, cerebral, or renal), amputation, and stroke. I will use the RENAAL trial database involving 1,513 Type 2 diabetic patients with nephropathy followed on average for 3.4 years. Cox proportional hazards regression models using baseline and follow-up (Hb) will be employed as the independent variable, and renal disease, cardiovascular disease, and vascular disease outcomes as dependent variables. Power analysis based on observed event rates in the RENAAL trial indicate 95% power to detect a 30% reduction in risk of the primary composite endpoint of doubling serum creatinine, ESRD or death for patients in the highest compared to the lowest quartile of baseline Hb. I expect these results will establish anemia as an independent risk factor for ESRD and cardiovascular morbidity and mortality in type 2 diabetics with progressing renal disease. These data could change practice and lead to new clinical trials.